South Korean steel major Posco finds the Indian market too expensive for raising funds for its proposed 12 million tonne steel plant in Orissa, but nevertheless has not closed the option of getting finance from the country.Cho Soung-Sik, CMD of Posco India, said the company plans to fund the project through both equity and debt instruments in the ratio of 35:65 respectively.The CMD said the entire equity portion, estimated at over Rs 18,000 crore, was expected to come from Posco itself. The company has not yet decided on funding from private equity (PE) investors, he added.The debt portion, estimated at around Rs 34,000 crore, would come from banks, corporate and syndicated loans among others, Soung-Sik said.He said that Indian financiers could join the process, but Posco India on its own was not approaching anyone for funds.Sang Moo Doh, chief representative of Posco India, said the company's decision about not seeking assistance from Indian financial institutions was based on the huge interest rate gap between the two countries, as rates are much higher here in India.
